India's services sector saw its steepest growth in ten months in this June, boosted by increasing demand both domestically and overseas, according to the HSBC's latest survey on Thursday.
The HSBC India Services Purchasing Managers' Index (PMI) — a seasonally adjusted series designed by S&P Global — rose to 60.4 in June, from 58.8 in May. A level above the neutral of 50.0 indicates expansion, while below points to contraction.
The survey pointed out that new business inflows expanded at their highest rate since August 2024. The local market was the main force behind the increase, with export orders also seeing a notable rise. Respondents to the survey reported increased foreign demand from major markets like Asia, the Middle East, and the United States.
This continued momentum in the services sector also had a positive effect on employment trends. Jobs increased for the 37th consecutive month in June. Although the rate of job creation exceeded the long-term trend, it did come in below May's record high.
At the same time, inflation of input costs eased to a ten-month low, remaining below the historic norm. In spite of a modest decrease from the prior month, the speed of price increases amongst service providers remained above the series average trend. Outstanding workloads increased modestly but more quickly than in May.
In the forward-looking perspective, service providers took a generally optimistic stance towards the forthcoming 12 months, with 18 per cent foreseeing increased levels of output. Nonetheless, that percentage represented the lowest level of business confidence observed since mid-2022, and it resulted in a decline in overall business confidence, which dipped below its long-term average.
The overall HSBC India Composite PMI — which follows joint performance in services and manufacturing — rose to 61.0 during June, up from 59.3 in May. This is the fastest expansion since May last year. Factory activity growth accelerated as indicated by Manufacturing PMI data earlier in the week, complementing strong services performance.
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